Sunday, December 4, 2022

Essex councils lent nearly £20 million to crisis-hit Thurrock

THE amount of money owed to local authorities in Essex by debt-ridden Thurrock Council has hit nearly £20million.

Freedom of information requests by the Local Democracy Reporting Service showed Colchester, Brentwood and Basildon councils lent £1.5m, £2m and £5m to Thurrock Council respectively, bringing the total invested by Essex councils to £19.5m.

The £5m invested by Basildon Borough Council has already been returned, according to a statement. The other two councils said they also expected their investments to be returned.

This comes after Castle Point, Maldon and Tendring district and borough councils confirmed earlier this year they had lent £11m between them.

A three-year investigation by The Bureau of Investigative Journalism revealed Thurrock Council borrowed more than £1billion and invested hundreds of millions of pounds, particularly in solar energy. The scale of the financial risks facing Thurrock Council prompted the government to intervene and Essex County Council now controls its financial functions.

The news comes Toucan Energy Holdings 1, the renewable energy company which owes Thurrock Council £655m, went into administration earlier this month.

According to a council report from October, the unitary authority was given permission to borrow £836m from the Public Works Loan Board as an “urgent solution” to its debt problems, of which £678.5m will be repaid to other councils.

According to its response, Colchester Borough Council lent £1.5m, which is due to be repaid on February 16 2023.

A spokesperson said in a statement: “Thurrock is currently being supported by the Government and the Public Works Loan Board and there is no question of default on this short-term loan given the financial arrangements put in place for Thurrock.”

Brentwood Borough Council made two investments of £1m each in Thurrock and these are due to mature on March 23 and April 5 next year.

A spokesperson for Brentwood Borough Council said: “We have confirmation from Thurrock Council that repayment of the inter-authority loans will be made in line with the agreed terms of the loans”.

According to its response, the borough council understands Thurrock borrowed the money, along with similar borrowings from other councils, to refinance maturing debt raised in previous years to finance its capital investment programme.

It also says the investments are protected and not secured by collateral on any of Thurrock’s assets.

Basildon Borough Council’s £5m loan matured on October 20 and the authority said it was returned.

A spokesperson said in a statement: “The investment and interest due were returned on the expected due date.”

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